No one has ever talked about sell through to consumers before Sony started this past holiday season, whether it be Sony, Microsoft, or Nintendo. The only figure we traditionally get from them is this shipment figure during quarterly reports. Anyone who has followed Sales-Age for more than a year knows this. This isn't some trickery by Microsoft, it's been standard practice in the game industry for decades now.
The five million number is an assumed number that comes from the fact major publishers stated an expectation of 10,000,000 Gen 8 consoles in the hands of consumers by the end of the fiscal year. The follow-on assumption is that Microsoft expected to have at least half of that market share.
There have been no internal memos leaked that I've seen referring to internal expectations for units shipped. Nor should there have been, honestly, since it's almost a foregone conclusion that your units shipped during first quarter of sales will be equivalent to your units manufactured, which should be a comfortably known quality. (Though, impressively, Microsoft seems to have had to stuff channels to even reach a five million shipped number, so from now on I suppose we have to question the ability of console manufacturers to meet their shipment numbers for the first quarter of a console's release, too. Go team!)
There is no scenario where Microsoft is happy with the numbers they are looking at. There is no scenario where investors are happy with the numbers they are looking at. They did not want to have to start offering retail price cuts this early just to get them to take on more stock. They did not want to see a dip in average daily console sales during the month Titanfall released. They do not want to be in the position of looking at either cutting the price and taking a significant loss on hardware or letting it languish and watching the XBL Gold subscription income dry up as PSN absorbs their users.
I have no idea why you are trying to pretend that Microsoft is popping champagne corks and dancing in the streets. I can dip over to Redmond and check, if you like; I'm pretty sure the mood is going to be somewhere between fervent and dour.
But no, the sales/shipments are in no way bad. If you go into older GAF threads about shipments actually you will see that no one here ever thought they'd reach this milestone before April by the way:
I really have no idea why you're linking me to a three-page GAF thread where almost no one even makes a substantiated estimate. Like most of the similar fart-on-the-wind threads from the same period of time, it's basically just a bunch of people making blind ratio guesses based on internet straw polls and Amazon pre-order "data".
The major publishers predicted a ten million install base, and considering they're the ones who have to do cost-benefit assessments on these multi-million dollar projects to determine whether or not they're going to be viable, I'm inclined to think they probably did quite a bit of homework before arriving at that estimate. (An estimate that has turned out to be fairly accurate, I would add.)
Now, they didn't specify ratios, but I'm going to go ahead and make the safe guess that most of them expected at least five million of that ten million to be XB1's. If not, it certainly begs the question of why EA would have gone so deep into their partnership.